DEMAT & DP

©2010 BSE Institute Limited

 What is Demat
Demat is a process by which Physical/Paper share
certificates or any other securities are converted into
electronic form making Storage safe and Transfer quick
and efficient.

The Shares today are issued in electronic form only.

©2010 BSE Institute Limited 2

Who can open Demat account

• Any individual, HUF, minor or even NRI

can open a demat account with designated
depository participants

• Know your client formalities (KYC)

Pan card, Ration Card, Electric Bill, Passport
Voter’s card, Bank pass book are required to
open the demat account.

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Depository and Participants.

CDSL
Depository NSDL

Depository Banks RTA Brokers

Participant

Beneficiary Individuals NRI HUF Corporate

Owner

©2010 BSE Institute Limited

CDSL and DPs

• CDSL operates through DPs i.e. Depository

participants

• Public sector, Private sector and Scheduled co-op.

banks work as DPs for CDSL.

• Big broking houses - Motilal Oswal, Angel Broking,

Asit C.Mehta, India Infoline broking + depository
services.
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Bank v/s Demat A/C.

• Customer • Beneficial Owner

• Keeps Money • Keeps Shares in

Electronic form
• Can withdraw Money
• Can sell shares
• Nomination Allowed
• Nomination allowed

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Opening and Operating A/C’s

• KYC Registration and Upload.

• Proofs Verification.
• Welcome Kit, Client master,
Opening DIS, Charges Schedule sent to
BO.
• Joint Holding/Nomination.

• On Market/Off Market Transfer.

• Demat/Remat.
• DIS/PoA.

Operating • Pledge.
• Transmission.
• Corporate action.
• Statements and Reports.
• Closing Accounts.

©2010 BSE Institute Limited

©2010 BSE Institute Limited
©2010 BSE Institute Limited
Services Offered.
• Account Opening
• To utilise the services offered by a depository, any person having investment in
any security or intending to invest in securities needs to have a demat account
with a CDSL-DP. The holder of such demat account is called as "Beneficial
Owner (BO)". A BO can maintain a demat account with zero balance in such
account. A BO can open more than one account with the same or multiple DPs, in
the same name/s and order, if he/she desires so. The investor can approach any
DP/s of his/her choice to open a demat account.
• Dematerialisation
• Dematerialisation is a process by which physical certificates (of shares /
debentures / other securities) are converted into electronic balances. A BO has to
submit the request for dematerialisation by submitting the demat request form
(DRF) duly completed along with the concerned physical certificates, to his/her
DP.
• Processing Delivery & Receipt Instructions
• To settle trades done on a stock exchange (on-market trades) and trades, which
are directly settled between two BOs (off-market trades), BOs submit duly
completed delivery instructions in the prescribed form to DP. For receipt of
securities into his/her account, a BO can give one time "standing instruction" to
DP. Once such a standing instruction is given to the DP, there is no need to
submit separate instructions forBSEreceipt
©2010 every time the investor buys securities.
Institute Limited
• Account Statement
• Generally a DP sends to the BO, a statement of his account, monthly, if there is
any transaction in the account or every quarter if the account is not operated
during that period.The balances and transactions can also be viewed by the BOs
through CDSL web based facility 'easi'.
• Rematerialisation
• Rematerialisation is the process by which the electronic balances held in the
demat account can be converted back into physical certificates.
• Pledging
• If the BO decides to pledge any securities in his BO account, he can avail of the
same by submitting the pledge creation form duly completed, to his DP.
• Nomination
• Individual BOs have a facility for nomination in favour of an individual. If the sole
or all the joint holders are deceased, the shares of different companies held in the
demat account will be transmitted easily to the demat account of the nominee on
submission of the death certificate and transmission form.
It may be noted that in the event of the death of one of the joint holders, the
securities will be transmitted in the demat account of the surviving holders.

©2010 BSE Institute Limited

• Transmission of securities
• CDSL offers a facility for transmission of balances held in BO account/s (to other
BO account/s) if so required due to death, lunacy, bankruptcy, insolvency or
required due to operation of any law.
• Change in Address
• A BO who wishes to register his change in address submits his/her request in
writing to his/her DP. The changes entered by the DP in the CDSL system will be
automatically downloaded to all the companies in which the BO is holding
securities. This facility offered by CDSL saves money, time and effort for the BO.
• Bank Account Details
• SEBI has made it mandatory for companies to print details of bank account of the
BO on dividend/interest warrants etc. to prevent possibilities of misuse of the
warrants. All BOs should submit a request in writing to the DP if they wish to
record / change their bank account details.
• SMS
• CDSL sends SMS regarding transactions and modifications in account details to
the mobile number registered in the account

©2010 BSE Institute Limited

NAMES OF DEMAT ACCOUNT
HOLDERS

• Addition not possible

• Deletion not possible

• Modification not possible

Miss. ASHA MADHU JOSHI

Mrs. ASHAPATIL
Mrs.AJIT
REKHA RAJESH SAWANT
©2010 BSE Institute Limited
CDSL v/s BANKS

What’s not similar

• No minimum balance requirement

• Shares not used by DPs/ Money utilized by
banks
• Accounts held at Depository level not at
participant level.

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CDSL - Depository (Services)

• Designated DPs such as banks, share

broker DPs open clients accounts and
demat physical shares.

• They maintain shares in electronic form

and send statement of holding every
month.

• IPO credit is given in clients accounts

• Completing market and off market trades

for Clients.

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Additional Services-through CDSL

• Allotment of Bonus and Rights Shares

• Loan against shares

• REMAT (from electronic to physical)

• Freezing of demat account for debits, credits

or both.

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Physical to Demat Form

• DPs with Demat Request Form

convert physical shares.
• Shares appear in electronic form appear in
your holding statement.

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CDSL – Time and Cost saving

• In case of change of address you need not write

to all the companies for change of address.

• You receive dividends in the bank a/c given to your

DP.

• Corporate Actions get directly credited.

• Data Back-Up and Ease of Accounting.

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Settlement of Shares

• On T + 2 basis shares are settled when sold.

• Seller receives cheque from his broker

and buyer receives shares from his
broker in his demat account.

• CDSL assists DPs for smooth functioning of these

procedures.

©2010 BSE Institute Limited 19

Settlement- = BSE
T+2
SMC India
Ramesh GLOBAL Infoline
seller Vijay
buyer
Pay-In
Seller’s Broker gives shares to Stock Exchange
Buyer’s Broker gives money to Stock Exchange

Pay-Out
Stock Exchange gives money to Seller’s Broker
Stock Exchange gives shares to Buyer’s Broker
©2010 BSE Institute Limited
IPO

• With demat account opened you can apply for

shares in electronic form.
• On allotment the shares will be credited to your
demat account.
• You can sell the shares immediately on
listing or hold it in your demat account for long
term.

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CDSL and liquidity

• Shares held in your demat account can be

pledged with your DP to avail loan.

• This creates liquidity. Payment of loan

can be done as per your convenience.

• Once the loan is repaid the shares are released back

to the owner.

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CDSL - Nomination

• Now nomination is made mandatory and is very

useful for both i.e. client and DP.

• Nomination can be done for single as well as joint

accounts.

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Life easy with CDSL

• While going out of station for longer periods, going

abroad you can always freeze your demat account.

• This avoids frauds and client can rest

assure that his account is safe in his absence.

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Insolvency of DP
• Client need not worry about the depository
participants status as even though any DP is
declared insolvent actual shares are held with
CDSL

• These shares can be accessed th’gh other DP in

such event.

©2010 BSE Institute Limited 25

CDSL – Smart
SMS related to Transactions

• With CDSL you can register your mobile number for SMART
facility.

• You will be informed about the debits in your demat

account by sending a sms directly from CDSL.

• SMS for credit in your A/c IPO allotment or corporate

benefits such as bonus, rights allotment.

• Avail valuation of your shares for holding.

• Sms sent twice a day morning 7 a.m. & eve.7 p.m.

©2010 BSE Institute Limited 26

CDSL (EASI)
• Electronic Access to Securities Information
(easi)
• Th’gh internet facility now client beneficiary
owner(BO) can view his securities in the
account
• Print transactions for last 7 days.
• Valuation of shares portfolio with
yesterday’s closing rates of BSE.

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CDSL – (EASIEST)

• Electronic Access to Securities Information and

Execution of Secured Transactions.
• With this facility applied, BO can enter debit
instruction to his account without filling up
the delivery instruction slip.
• Facilities of ‘easi’ are also available for the
users of ‘easiest’
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HOW to avail these services
• You can download the form for SMART, ‘easi’ or
‘easiest’ from CDSL website i.e. www.cdslindia.com
or the same can be asked from the DP where
you maintain your account.

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Selection of DP

• For availing Depository services you can visit

the DP nearest to your house or office.

• Compare the charges of DP and addl. Services.

• The list of DPs is available on the website of

CDSL i.e. www.cdslindia.com .

• With broker DP you can avoid giving delivery

instruction slips for every selling transaction,
however it is an individual decision to choose
the DP.
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WHY CDSL?
• Convenience:
• Wide DP Network: CDSL has a wide network of DPs, operating from over 10,000
sites, across the country, offering convenience for an investor to select a DP
based on his location.
• On-line DP Services:The DPs are directly connected to CDSL thereby providing
on-line and efficient depository service to investors.
• Wide Spectrum of Securities Available for Demat:The equity shares of almost
all A, B1 & B2 group companies are available for dematerialisation on CDSL,
consisting of Public (listed & unlisted) Limited and Private Limited companies.
These securities include equities, bonds, units of mutual funds, Govt. securities,
Commercial papers, Certificate of deposits; etc. Thus, an investor can hold almost
all his securities in one account with CDSL. A BO can also hold warehouse
receipts pertaining to commodities, in a demat account. However, a separate
account should be opened for holding warehouse receipts.
• Competitive Fees Structure: CDSL has kept its tariffs very competitive to
provide affordable depository services to investors.
• Internet Access:A DP, which registers itself with CDSL for Internet access, can
in turn provide demat account holders with access to their account on the Internet.

©2010 BSE Institute Limited

• Dependability:
• On-line Information to Users: CDSL's system is built on a centralised database
architecture and thus enables DPs to provide on-line depository services with the
latest status of the investor's account.
• Convenient to DPs: The entire database of investors is stored centrally at CDSL.
If there is any system-related issues at DPs end, the investor is not affected, as
the entire data is available at CDSL.
• Contingency Arrangements:CDSL has made provisions for contingency
terminals, which enables a DP to update transactions, in case of any system
related problems at the DP's office.
• Meeting User's Requirements: Continuous updation of procedures and
processes in tune with evolving market practices is another hallmark of CDSL's
services.
• Audit and Inspection: CDSL conducts regular audit of its DPs to ensure
compliance of operational and regulatory requirements.
• Dormant Account Monitoring: CDSL has in place a mechanism for monitoring
dormant accounts.
• Helpdesk: DPs and investors can obtain clarifications and guidance from CDSL's
prompt and courteous helpline facility.
©2010 BSE Institute Limited
• Security:
• Computer Systems: All data held at CDSL is automatically mirrored at
the Disaster Recovery site and is also backed up and stored in fireproof
cabinets at the main and disaster recovery site.
• Unique BO Account Number: Every BO in CDSL is allotted a unique
account number, which prevents any erroneous entry or transfer of
securities. If the transferor's account number is wrongly entered, the
transaction will not go through the CDSL system, unless corrected.
• Data Security: All data and communications between CDSL and its
users is encrypted to ensure its security and integrity.
• Claims on DP: If any DP of CDSL goes into liquidation, the creditors of
the DP will have no access to the holdings of the BO.
• Insurance Cover: CDSL has an insurance cover in the unlikely event of
loss to a BO due to the negligence of CDSL or its DPs

©2010 BSE Institute Limited

CDSL - What’s New
• MUTUAL FUNDS WILL BE
TRADED THROUGH STOCK
EXCHANGE.
• GET YOUR MUTUAL FUNDS
UNITS DEMATTED WITH YOUR
DP.
• GET COMBINED STATEMENT OF
HOLDING FOR SHARES & MFs.

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 MUTUAL
FUND
UNITS
IN
DEMAT
©2010 BSE Institute Limited
CDSL - What’s New
• NOW VERY SOON LIFE
INSURANCE POLICIES WILL BE
ISSUED IN DEMAT FORM

• ALSO EDUCATION SYSTEM

SHALL COME UNDER DEMAT
VERY SOON.

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CDSL – TODAY

• CDSL has 577 Depository Participants

servicing more than 80 lac clients all over
India.
• CDSL has ISO 27001 Certification
• CDSL has more than 10,000 DP service
centres across the country.

©2010 BSE Institute Limited

 Thank You
©2010 BSE Institute Limited